BRIDGES INVESTMENT FUND, INC.
SECOND QUARTER OR SEMI-ANNUAL
2000
CONTENTS OF REPORT
Pages 1 - 2 Shareholder Letter
Exhibit 1 Portfolio Transactions from April 1, 2000,
through June 30, 2000
Exhibit 2 Quarter-to-Quarter Changes in Financial Data
Pages F1-F14 Unaudited Financial Statements for the
Six Months Ended June 30, 2000
This report has been prepared for the information of the shareholders
of Bridges Investment Fund, Inc. and is under no circumstances to be
construed as an offering of shares of the Fund. Such offering is made only
by Prospectus, a copy of which may be obtained by inquiry to the Fund's
office.
<PAGE>
BRIDGES INVESTMENT FUND, INC.
8401 West Dodge Road
Omaha, Nebraska 68114
Telephone 402-397-4700
Facsimile 402-397-8617
Directors
Frederick N. Backer
Edson L. Bridges II
Edson L. Bridges III
N. P. Dodge, Jr.
John W. Estabrook
Jon D. Hoffmaster
John J. Koraleski
Roger A. Kupka
Gary L. Petersen
John T. Reed
Roy A. Smith
Janice D. Stoney
L.B. Thomas
John K. Wilson
Officers
Edson L. Bridges II - Chairman and
Chief Executive Officer
Edson L. Bridges III _ President and
Chief Investment Officer
Brian M. Kirkpatrick _ Vice President
Mary Ann Mason - Secretary
Kathleen J. Stranik - Assistant Secretary
Nancy K. Dodge - Treasurer
Linda J. Morris _ Assistant Treasurer
Auditor
KPMG LLP
Two Central Park Plaza
Suite 1501
Omaha, Nebraska 68102-1617
Corporate Counsel
Baird, Holm, McEachen,
Pedersen, Hamann & Strasheim
1500 Woodmen Tower
Omaha, Nebraska 68102
<PAGE>
July 26, 2000
Dear Shareholder:
Investment Results
Bridges Investment Fund, Inc. had a total return of -7.73% during the
Second Quarter, 2000, based on a March 31, 2000, net asset value of $46.30 per
share and a June 30, 2000, NAV of $42.63 per share. On a calendar year-to-date
basis for the period ending June 30, Bridges Investment Fund had a total return
of -6.19%. On a trailing 12-month basis for the period ending June 30, Bridges
Investment Fund had a total return of 15.44%. By comparison, the S&P 500 had
total returns of -2.66% for the Second Quarter, -0.42% for the first six months
of the year, and 7.25% for the trailing 12 months ended June 30, 2000.
The Second Quarter was characterized by continued volatility in the stock
market. After an interim market peak of 5048.62 on March 10, the NASDAQ
Composite fell 37.30% to a correction low of 3164.55 on May 23 before rallying
25.36% through the end of the quarter. The S&P 500 and the Dow Jones Industrial
Average also experienced similar although not as significant price volatility
during the quarter. We believe the price weakness experienced in the market in
general and in technology stocks in particular (technology was the hardest hit
sector during the quarter) was part of a normal and much needed corrective
process that came about as market valuations reached unsustainable and, in many
cases, inexplicable levels by mid March.
While the recent recovery in technology stocks has resulted in that segment of
the market once again experiencing large valuations, we continue to believe that
the technology sector offers the best potential for long-term growth in
corporate profits. However, because of the volatile and ever changing nature of
the technology industry and because of the high valuation levels accorded many
<PAGE>
technology stocks, this is likely to be an area of the market that continues to
be characterized by very wide price swings throughout the remainder of 2000 and
beyond. Our approach to investing in technology stocks will continue to
emphasize the identification of those companies which we believe have dominant
market share positions in fast growing markets and a demonstrable ability to
manage through the change and volatility inherent in the industry.
The following table summarizes the 10 largest equity holdings in the Fund
as of June 30, 2000, and contains some relevant performance and valuation data:
<TABLE>
<CAPTION>
06/30/00 % % OF TOT. TOT. TOT. EPS EPS EPS
RTN. RTN. RTN. LT.
NO. OF MARKET OF TOTAL % CHG. % CHG. % CHG. 5 YR. % P/E P/E FUTURE
HIST. CHG.
SHARESCOMPANY VALUE EQUITIE ASSETS QTD. YTD. 12 GR. 00 2000 2001 GR.
S MOS. RATE VS. RATE
99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20,000INTEL 2,673,760 4.3% 3.5% 1.3% 62.4%124.7% 20% 45% 39.8 37.0 20%
32,000EMC CORP 2,438,080 4.0% 3.2% 22.9% 40.8%179.8% 32% 38% 104.0 79.3 30%
48,000NOKIA 2,403,024 3.9% 3.2% -8.1% 4.5%118.2% - 37% 64.0 49.4 30%
36,000CISCO 2,288,268 3.7% 3.0%-17.8% 18.7% 97.3% 35% 41% 120.0 92.1 30%
SYSTEMS
40,000CAPITAL ONE 1,785,000 2.9% 2.4% -6.9% -7.4%-19.9% 28% 31% 19.8 15.9 25%
FIN'L
70,000WEST 1,771,910 2.9% 2.3% -1.7% 3.6%170.0% 5% 25% 26.4 22.0 22%
TELESERVICES
40,000VODAFONE 1,670,000 2.7% 2.2%-24.9% -15.7% 6.0% 27% 22% 56.4 58.8 30%
AIRTOUCH
20,000MICROSOFT 1,600,000 2.6% 2.1%-24.7% -31.5%-11.3% 45% 22% 47.3 42.6 25%
26,000QUALCOMM 1,560,000 2.5% 2.1%-59.8% -65.9% 67.2% 292% 77% 56.6 43.5 40%
50,000GAP 1,550,000 2.5% 2.1%-37.8% -32.6%-38.5% 36% 22% 20.1 16.6 20%
19,740,042 32.0% 26.2%
TOTAL 80.5%
EQUITIES 60,702,650 80.5%
TOTAL ASSETS 75,423,592
</TABLE>
While the Fund's short-term performance was disappointing during the Second
Quarter, we believe it was explainable, as a number of the stocks that had
driven a strong total return performance for the Fund during 1999 and the First
Quarter of 2000 declined in the Second Quarter as near-term valuations reached
high levels. During the Quarter, the Fund's equities had a total return of -
9.22%.
Five technology stocks (Cisco, Echostar, Microsoft, Qualcomm, and Vodafone)
accounted for 80% of the Fund's $5.4 million market value decline during the
quarter. Three retail stocks (Gap, Home Depot, and Target) accounted for an
additional $1.6 million market value decline, as investors sold off retail
issues due to fears of slowing earnings growth in that sector in a rising
interest rate environment. Excluding these eight stocks, the Fund's remaining
common stocks would have produced a positive total return during a quarter in
which the S&P 500 declined 0.42%. Qualcomm alone accounted for approximately
40% of the Fund's equity value decline during the quarter and $2.8 million of
<PAGE>
the $3.3 million market value decline in the Fund's common stocks for the first
six months of the year. However, on a trailing 12-month basis, Qualcomm had a
total return of 67.25% within the Fund, and we remain constructive on the long-
term prospects for the company.
As always, our focus will remain on holding in the Fund's portfolio those
companies which we believe embody the best combination of above-average earnings
and cash flow growth prospects and reasonable valuation characteristics. We
will look to capitalize on the opportunities afforded us by the volatility we
expect in the market over the next several quarters. We appreciate your
confidence in our growth-oriented approach to investing and your patience during
those periods of time when our short-term results may be disappointing.
Capital Gain Distribution
On April 24, 2000, the Fund distributed $.6910571 per share in capital
gains realized during the November 1, 1999, to December 31, 1999, time frame.
This payment was declared by the Board of Directors with a record date of
January 11, 2000, for the shares outstanding that were entitled to the
distribution.
Dividend
On July 11, 2000, the Board of Directors declared a $.105 per share
dividend on the shares of capital stock outstanding on July 11, 2000, with this
income distribution amount to be payable on or about July 24, 2000. This
dividend is payable from net investment income earned during the April-June 2000
Quarter.
The Board of Directors and the management thank you for your investment in
our Fund.
Sincerely yours,
Edson L. Bridges III, CFA
President
Edson L. Bridges II, CFA
Chairman
ELBIII:ELBII:kjs:elc
<PAGE>
<TABLE>
Exhibit 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
APRIL 1, 2000, THROUGH JUNE 30, 2000
<CAPTION>
Bought or Held After
Securities Received Transaction
Common Stocks Unless $1,000 Par $1,000 Par
Described Otherwise Value (M) Value (M)
or Shares or Shares
<S> <C> <C>
<F1>(1) AES Corporation 10,000 20,000
<F2>(2) AT&T Corp. - Liberty Media 5,000 10,000
<F3>(3) American Express Company 10,000 15,000
American International Group 1,875 5,000
Amgen, Inc. 1,000 13,000
<F4>(4) BP Amoco PLC Spons. ADR 6,560 19,792
Broadcom Corp. 6,000 7,500
CSG Systems International, Inc. 2,000 22,000
Carnival Corp. Class A 5,000 5,000
<F5>(5) Chase Manhattan Corp. 1,000 3,000
Citigroup 3,000 5,000
<F6>(6) Dow Chemical 12,000 18,000
<F7>(7) EMC Corp. 16,000 32,000
Echostar Communications Corp. 6,000 16,000
First Data Corp. 5,000 15,000
<F8>(8) General Electric 16,000 24,000
I2 Technologies, Inc. 1,500 3,000
Interpublic Group Cos., Inc. 1,000 5,000
Medtronic, Inc. 2,000 7,000
Morgan Stanley Dean Witter, 3,000 13,000
Discover & Co.
<F9>(9) Nokia 36,000 48,000
PMC - Sierra 8,000 8,000
<F10>(10) Paychex, Inc. 2,500 7,500
Qualcomm, Inc. 2,000 28,000
Schwab, Charles Corp. 5,000 5,000
Sun Microsystems, Inc. 3,000 13,000
<F11>(11) Texas Instruments, Inc. 5,000 8,000
U. S. Bancorp 5,000 10,000
VERITAS Software Company 2,000 3,500
West Teleservices 10,000 70,000
Various Issues of Commercial Paper 120,845M 9,345M
Notes Purchased during
2nd Quarter, 2000
<PAGE>
Exhibit 1
BRIDGES INVESTMENT FUND, INC.
PORTFOLIO TRANSACTIONS
DURING THE PERIOD FROM
APRIL 1, 2000, THROUGH JUNE 30, 2000
(Continued)
<CAPTION>
Sold or Held After
Securities Exchanged Transacion
Common Stocks Unless $1,000 Par $1,000 Par
Described Otherwise Value (M) Value (M)
or Shares or Shares
<S> <C> <C>
America Online, Inc. 10,000 --
<F12>(12) Atlantic Richfield 4,000 --
BP Amoco PLC Spons. ADR 792 19,000
Boeing Co. 12,000 --
Broadcom Corp. 5,500 2,000
Brocade Communications 2,500 --
Exxon Mobil Corp. 280 13,000
Gannett, Inc. 8,000 --
Hewlett Packard Co. 6,000 --
JDS Uniphase Corp. 2,500 --
Juniper Networks 1,500 --
Nucor Corp. 5,500 --
PMC - Sierra 6,000 2,000
Pepsico, Inc. 4,000 20,000
Qualcomm, Inc. 2,000 26,000
Verisign, Inc. 1,000 --
Veritas Software Co. 1,500 2,000
Various Issues of Commercial 116,925M --
Paper Notes maturing during
2nd Qtr., 2000
<F1>(1) Received 10,000 shares in a 2-for-1 stock split on June 2, 2000.
<F2>(2) Received 5,000 shares in a 2-for-1 stock split on June 12, 2000.
<F3>(3) Received 10,000 shares in a 3-for-1 stock split on May 11, 2000.
<F4>(4) Received 6,560 shares from the acquisition of Atlantic Richfield on
April 18, 2000.
<F5>(5) Received 1,000 shares in a 3-for-2 stock split on June 12, 2000.
<F6>(6) Received 12,000 shares in a 3-for-1 stock split on June 19, 2000.
<F7>(7) Received 16,000 shares in a 2-for-1 stock split on June 5, 2000.
<F8>(8) Received 16,000 shares in a 3-for-1 stock split on May 8, 2000.
<F9>(9) Received 36,000 shares in a 4-for-1 stock split on April 11, 2000.
<F10>(10) Received 2,500 shares in a 3-for-2 stock split on May 23, 2000.
<F11>(11) Received 3,500 shares in a 2-for-1 stock split on May 23, 2000.
<F12>(12) Converted 4,000 shares into BP Amoco PLC Spons. ADR stock upon their
merger on April 18, 2000.
</TABLE>
<PAGE>
<TABLE>
Exhibit 2
BRIDGES INVESTMENT FUND, INC.
SELECTED HISTORICAL FINANCIAL INFORMATION
- - - - - - - - - - - - -Year End Statistics - - - - - - - - - - - - -
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
<S> <C> <C> <C> <C> <C>
07-01-63 $ 109,000 10,900 $10.00 $ - $ -
12-31-63 159,187 15,510 10.13 .07 -
12-31-64 369,149 33,643 10.97 .28 -
12-31-65 621,241 51,607 12.04 .285 .028
12-31-66 651,282 59,365 10.97 .295 -
12-31-67 850,119 64,427 13.20 .295 -
12-31-68 1,103,734 74,502 14.81 .315 -
12-31-69 1,085,186 84,807 12.80 .36 -
12-31-70 1,054,162 90,941 11.59 .37 -
12-31-71 1,236,601 93,285 13.26 .37 -
12-31-72 1,272,570 93,673 13.59 .35 .08
12-31-73 1,025,521 100,282 10.23 .34 .07
12-31-74 757,545 106,909 7.09 .35 -
12-31-75 1,056,439 111,619 9.46 .35 -
12-31-76 1,402,661 124,264 11.29 .38 -
12-31-77 1,505,147 145,252 10.36 .428 .862
12-31-78 1,574,097 153,728 10.24 .481 .049
12-31-79 1,872,059 165,806 11.29 .474 .051
12-31-80 2,416,997 177,025 13.65 .55 .0525
12-31-81 2,315,441 185,009 12.52 .63 .0868
12-31-82 2,593,411 195,469 13.27 .78 .19123
12-31-83 3,345,988 229,238 14.60 .85 .25
12-31-84 3,727,899 278,241 13.40 .80 .50
12-31-85 4,962,325 318,589 15.58 .70 .68
12-31-86 6,701,786 407,265 16.46 .688 .86227
12-31-87 7,876,275 525,238 15.00 .656 1.03960
12-31-88 8,592,807 610,504 14.07 .85 1.10967
12-31-89 10,895,182 682,321 15.97 .67 .53769
12-31-90 11,283,448 744,734 15.15 .67 .40297
12-31-91 14,374,679 831,027 17.30 .66 .29292
12-31-92 17,006,789 971,502 17.51 .635 .15944
12-31-93 17,990,556 1,010,692 17.80 .6225 .17075
12-31-94 18,096,297 1,058,427 17.10 .59 .17874
12-31-95 24,052,746 1,116,620 21.54 .575 .19289
12-31-96 29,249,488 1,190,831 24.56 .55 .25730
12-31-97 36,647,535 1,262,818 29.02 .5075 .30571
12-31-98 48,433,113 1,413,731 34.26 .44 2.11648
12-31-99 69,735,684 1,508,154 46.24 .30 .91088
- - - Current Quarter Compared to Same Quarter in Prior Year - - -
<CAPTION>
Valuation Net Shares Net Asset Dividend/ Capital
Date Assets Outstanding Value/Share Share Gains/Share
<S> <C> <C> <C> <C> <C>
06-30-99 56,490,020 1,463,133 38.61 .075 -
06-30-00 75,423,592 1,769,126 42.63 .085 -
</TABLE>
<PAGE>
<TABLE>
F-1
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS - (80.5%)
Advertising _ 0.3%
Interpublic Group of Companies, Inc. (The) 5,000 $ 151,678 $ 215,000
Banking and Finance - 2.7%
Chase Manhattan Corporation (The) 3,000 $ 86,650 $ 138,189
First National of Nebraska, Inc. 230 346,835 478,400
State Street Corporation 8,000 66,525 848,504
U.S. Bancorp 10,000 282,657 192,500
Wells Fargo & Co. 10,000 138,173 387,500
$ 920,840 $ 2,045,093
Beverages _ Soft Drinks - 1.2%
PepsiCo, Inc. 20,000 $ 256,225 $ 888,760
Broadcast Service/Program _ 0.3%
AT&T Corporation _ Liberty Media*<FN> 10,000 $ 248,596 $ 243,750
Chemicals - 0.7%
The Dow Chemical Company 18,000 $ 396,947 $ 549,900
Communications _ Radio and Television _ 1.0%
Clear Channel Communications, Inc.*<FN> 10,000 $ 366,954 $ 750,000
Computers _ Hardware and Software - 8.9%
Cisco Systems, Inc.*<FN> 36,000 290,726 2,288,268
HNC Software, Inc.*<FN> 18,000 598,741 1,111,500
I2 Technologies, Inc.*<FN> 3,000 480,406 312,798
Microsoft Corporation*<FN> 20,000 93,361 1,600,000
Tibco Software, Inc.*<FN> 6,000 153,194 643,380
Transaction Systems Architects, Inc.*<FN> 32,000 1,102,118 547,840
VERITAS Software Corporation*<FN> 2,000 256,063 226,040
$ 2,974,609 $ 6,729,826
Computers _ Memory Devices _ 3.2%
EMC Corporation/MASS*<FN> 32,000 $ 358,855 $ 2,438,080
Computers _ Micro _ 1.6%
Sun Microsystems, Inc.*<FN> 13,000 $ 523,875 $ 1,182,194
Cruise Lines - 0.1%
Carnival Corporation 5,000 $ 120,975 $ 97,200
Data Processing and ManagemenT _ 2.6%
CSG Systems*<FN> 22,000 $ 734,563 $ 1,233,386
First Data Corporation 15,000 728,228 744,375
$ 1,462,791 $ 1,977,761
<FN>*Nonincome-producing security
F-2
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
JUNE 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Diversified Operations _ 1.2%
Berkshire Hathaway Inc., Class B *<FN> 500 $ 600,020 $ 880,000
Drugs - Medicines _ Cosmetics - 6.9%
Abbott Laboratories 15,000 $ 169,395 $ 665,550
Amgen, Inc.*<FN> 13,000 314,250 913,250
Bristol-Myers Squibb Co. 8,000 141,675 461,000
Elan Corporation PLC ADR*<FN> 20,000 419,005 968,760
Johnson & Johnson 10,000 109,396 1,005,000
Merck & Co., Inc. 16,000 274,266 1,198,400
$ 1,427,987 $ 5,216,960
Electrical Equipment and Supplies - 1.6%
General Electric Co. 24,000 $ 147,473 $ 1,248,000
Electric _ Generation _ 1.8%
AES Corporation*<FN> 20,000 $ 635,202 $ 912,500
Broadcom Corporation Class A*<FN> 2,000 294,990 437,876
$ 930,192 $ 1,350,376
Electronic Components _ Conductors _ 2.6%
Altera Corporation*<FN> 10,000 $ 563,375 $ 1,019,380
PMC - Sierra, Inc.*<FN> 2,000 383,000 355,376
Texas Instruments Incorporated 8,000 686,206 549,504
$ 1,632,581 $ 1,924,260
Electronics - 5.7%
Flextronics International Ltd.*<FN> 5,000 $ 316,485 $ 343,440
Intel Corporation 20,000 334,735 2,673,760
Solectron Corporation *<FN> 30,000 439,416 1,256,250
$ 1,090,636 $ 4,273,450
Finance _ Credit Cards _ 1.0%
American Express Company 15,000 $ 543,410 $ 781,875
Finance _ Diversified _ 1.8%
Citigroup, Inc. 5,000 $ 320,404 $ 300,950
Morgan Stanley, Dean Witter, Discover & Co. 13,000 659,100 1,082,250
$ 979,504 $ 1,383,200
Finance _ Investment Banks _ 0.5%
Merrill Lynch & Co., Inc. 3,000 $ 168,586 $ 345,000
<FN>*Nonincome-producing security
F-3
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
JUNE 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Finance - Real Estate - 1.6%
Freddie Mac 30,000 $ 470,320 $ 1,215,000
Finance _ Services - 2.8%
Capital One Financial Corporation 40,000 $ 866,856 $ 1,785,000
Paychex, Inc. 7,500 154,125 315,000
$ 1,020,981 $ 2,100,000
Insurance _ Multiline - 0.8%
American International Group, Inc. 5,000 $ 345,728 $ 587,500
Internet Brokers _ 0.2%
Charles Schwab Corporation (The) 5,000 $ 153,787 $ 168,125
Linen Supply and Related Products - 0.3%
Cintas Corporation*<FN> 6,000 $ 166,578 $ 220,125
Medical Instruments - 0.5%
Medtronic, Inc. 7,000 $ 351,996 $ 348,691
Motion Pictures and Theatres - 1.1%
The Walt Disney Company 22,000 $ 236,300 $ 849,640
Petroleum Producing - 3.9%
BP Amoco PLC-Sponsored ADR 19,000 $ 443,238 $ 1,075,875
Chevron Corporation 10,000 340,535 849,380
Exxon Mobil Corporation 13,000 318,735 1,024,530
$ 1,102,508 $ 2,949,785
Publishing _ Electronic - 0.7%
Reuters Group PLC, ADR Sponsored 5,199 $ 166,303 $ 519,578
Retail Stores _ Apparel and Clothing - 2.1%
Gap, Inc. 50,000 $ 521,360 $ 1,550,000
Retail Stores _ Building Materials and Home
Improvement _ 2.0%
The Home Depot, Inc. 30,000 $ 587,115 $ 1,500,000
Retail Stores _ Department - 1.2%
Target Corporation 15,000 $ 146,129 $ 870,000
<FN>*Nonincome-producing security
F-4
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
JUNE 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Telecommunications - 9.7%
Level 3 Communications *<FN> 15,000 $ 876,675 $ 1,320,000
Sprint Corporation 10,000 83,964 525,000
Sprint PCS Corporation *<FN> 15,000 424,658 892,500
Vodafone Airtouch PLC Sponsored ADR 40,000 915,541 1,670,000
VoiceStream Wireless Cororation*<FN> 2,000 238,125 232,594
West Teleservices Corporation*<FN> 70,000 1,031,597 1,771,910
WorldCom, Inc. *<FN> 20,000 490,156 917,500
$ 4,060,716 $ 7,329,504
Telecommunications _ Equipment _ 5.3%
Nokia Corporation Sponsored ADR 48,000 492,858 2,403,024
Qualcomm Incorporated *<FN> 26,000 605,060 1,560,000
$ 1,097,918 $ 3,963,024
Telecommunications - Satellite - 0.7%
EchoStar Communications Corporation*<FN> 16,000 $ 906,306 $ 529,744
Television _ Cable _ 0.5%
Comcast Corporation*<FN> 10,000 $ 309,375 $ 405,000
Transportation _ Airfreight _ 1.4%
EGL, Inc. *<FN> 35,000 $ 466,542 $ 1,076,250
TOTAL COMMON STOCKS (Cost - $27,412,696) $27,412,696 $60,702,651
PREFERRED STOCKS (1.1%)
Banking and Finance _ 0.7%
CFB Capital II 8.20% Cumulative Preferred 5,000 $ 125,000 $ 104,375
CFC Capital Trust 9.375% Preferred, Series B 5,000 125,000 112,500
Harris Preferred Capital Corp., 10,000 250,000 210,000
7.375%, Series A
Silicon Valley Bancshares 5,000 125,000 100,000
8.25% Preferred Series I
$ 625,000 $ 526,875
Oil Comp. _ Exploration and Production _ 0.1%
Canadian Occidental Petroleum Ltd. 5,000 $ 125,000 $ 114,375
9.375% Preferred _ Series 1
<FN>*Nonincome-producing security
F-5
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
JUNE 30, 2000
(Unaudited)
<CAPTION>
Number Market
Title of Security of Shares Cost Value
<S> <C> <C> <C>
Utilities _ Electric _ 0.3%
Tennessee Valley Authority 6.75% 10,000 $ 250,000 $ 217,030
Variable Preferred Series D
Total Preferred Stocks (Cost - $1,000,000) $ 1,000,000 $ 858,280
Total Stocks (Cost - $28,412,696) $28,412,696 $61,560,931
DEBT SECURITIES (17.7%)
Auto-Cars/Light Trucks _ 0.3%
General Motors Corporation 7.700% Debentures
due April 15, 2016 $250,000 $ 252,320 $ 245,700
Energy _ Alternate Sources - 0.3%
CalEnergy Co., Inc., 7.630% Notes
due October 15, 2007 $200,000 $ 200,000 $ 195,940
Hotels and Motels _ 0.3%
Marriot International 7.875% Notes Series C
due September 15, 2009 $250,000 $ 250,068 $ 243,900
Household Appliances and Utensils - 0.1%
Maytag Corp., 9.750% Notes,
due May 15, 2002 $100,000 $ 102,200 $ 104,011
Retail Stores _ Department - 0.3%
Dillard Department Stores, Inc., 7.850%
Debentures, due October 1, 2012 $150,000 $ 151,347 $ 123,705
Sears Roebuck & Co., 9.375% Debentures
due November 1, 2011 100,000 $ 106,399 105,948
$ 257,746 $ 229,653
Telecommunications _ 0.3%
Level 3 Communications, Inc., 9.125% Senior $250,000 $ 241,938 $ 224,900
Notes due May 1, 2008
U.S. Government _ 3.7%
U.S. Treasury, 8.750% Notes,
due August 15, 2000 200,000 $ 211,900 $ 200,687
U.S. Treasury, 8.000% Notes,
due May 15, 2001 200,000 199,052 202,560
F-6
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)
JUNE 30, 2000
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Cost Value
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
U.S. Treasury, 7.500% Notes,
due May 15, 2002 200,000 214,098 203,740
U.S. Treasury, 10.750% Bonds
due February 15, 2003 200,000 219,525 220,500
U.S. Treasury, 7.250% Notes,
due May 15, 2004 300,000 303,245 309,600
U.S. Treasury, 7.500% Notes,
due February 15, 2005 300,000 305,871 314,610
U.S. Treasury, 9.375% Bonds,
due February 15, 2006 200,000 256,223 228,969
U.S. Treasury, 7.625% Bonds,
due February 15, 2007 300,000 307,910 304,830
U.S. Treasury, 8.750% Bonds,
due November 15, 2008 200,000 237,472 213,160
U.S. Treasury, 9.125% Bonds,
due May 15, 2009 200,000 234,910 217,594
U.S. Treasury, 7.500% Bonds,
due November 15, 2016 300,000 308,539 338,310
$ 2,798,744 $ 2,754,560
Commercial Paper _ Short Term _ 12.4%
American Express Credit Corporation
Commercial Paper Note 6.48%
due July 7, 2000 $ 735,000 $ 735,000 $ 735,000
Ford Motor Credit Corporation
Commercial Paper Note 6.59%
due July 7, 2000 3,000,000 3,000,000 3,000,000
General Electric Credit Corporation
Commercial Paper Note 6.57%
due July 5, 2000 1,910,000 1,910,000 1,910,000
<PAGE>
F-7
BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2000
(Unaudited)
<CAPTION>
Principal Market
Title of Security Amount Cost Value
<S> <C> <C> <C>
DEBT SECURITIES (Continued)
Prudential Funding Corporation
Commercial Paper Note 6.64%
due July 5,2000 3,700,000 3,700,000 3,700,000
$ 9,345,000 $ 9,345,000
TOTAL DEBT SECURITIES (Cost - $13,448,016) $13,448,016 $13,343,664
TOTAL INVESTMENTS IN SECURITIES - (99.3%)
(Cost - $41,860,712) $41,860,712 $74,904,595
CASH AND RECEIVABLES
LESS TOTAL LIABILITIES _ (0.7%) 518,997
NET ASSETS, June 30, 2000 _ (100.0%) $75,423,592
<FN>The accompanying notes to financial statements
are an integral part of this schedule.
</TABLE>
<PAGE>
<TABLE>
F-8
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(Unaudited)
<CAPTION>
ASSETS
Amount
<S> <C>
Investments, at market value
Common and preferred stocks
(cost $28,412,696) $61,560,931
Debt securities (cost $13,448,016) 13,343,664
Total investments $74,904,595
Cash 259,391
Receivables
Dividends and interest 95,662
Subscriptions to capital stock 304,970
TOTAL ASSETS $75,564,618
LIABILITIES
Redemption of capital stock $ 14,300
Investment advisor, management and
service fees payable 92,655
Accrued operating expenses 34,071
TOTAL LIABILITIES $ 141,026
NET ASSETS
Capital stock, $1 par value -
Authorized 3,000,000 shares,
1,769,126 shares outstanding $ 1,769,126
Paid-in surplus - 38,985,509
Net capital paid in on shares $40,754,635
Net unrealized appreciation
on investments 1,418,372
Accumulated undistributed
net realized gains 33,043,883
Accumulated undistributed
net investment income 206,702
TOTAL NET ASSETS $75,423,592
NET ASSET VALUE PER SHARE $42.63
OFFERING PRICE PER SHARE $42.63
REDEMPTION PRICE PER SHARE $42.63
<FN>The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
<PAGE>
<TABLE>
F-9
BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
<CAPTION>
INVESTMENT INCOME Amount Amount
<S> <C> <C>
Interest $404,576
Dividends (Net of foreign withholding taxes
of $3,038) 197,824
Total Investment Income $ 602,400
EXPENSES
Management fees $ 181,838
Custodian fees 23,184
Insurance and Other Administrative Fees 12,698
Bookkeeping services 11,518
Printing and supplies 10,283
Professional services 6,045
Dividend disbursing and transfer
agent fees 14,402
Computer programming 2,500
Taxes and licenses 532
Total Expenses $ 263,000
NET INVESTMENT INCOME $ 339,400
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on transactions in
investment securities $1,418,372
Net decrease in unrealized
appreciation of investments (6,307,093)
NET REALIZED GAIN AND
UNREALIZED LOSS ON INVESTMENTS $(4,888,721)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(4,549,321)
<FN>The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
</TABLE>
<PAGE>
<TABLE>
F-10
BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<CAPTION>
2000 1999
<S> <C> <C>
INCREASE IN NET ASSETS
Operations -
Net investment income $ 339,400 $ 209,109
Net realized gain on transactions in
investment securities 1,418,372 526,587
Net decrease in unrealized
appreciation of investments (6,307,093) 5,660,229
Net decrease in net assets
resulting from operations $ (4,549,321)$ 6,395,925
Net equalization credits 9,694 1,223
Distributions to shareholders from -
Net investment income (143,785) (108,250)
Net realized gain from investment
transactions (1,058,779) -
Return of capital - -
Net capital share transactions 11,430,099 1,768,009
Total increase in Net Assets $ 5,687,908 $ 8,056,907
NET ASSETS:
Beginning of year $ 69,735,684 $48,433,113
End of six months $ 75,423,592 $56,490,020
<FN>The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
F-11
BRIDGES INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Bridges Investment Fund, Inc. (Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The primary investment objective of the Fund is long-
term capital appreciation. In pursuit of that objective, the Fund invests
primarily in common stocks. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements. The policies are in conformity with generally
accepted accounting principles.
A. Investments -
Security transactions are recorded on the trade date at purchase
cost or sales proceeds. Dividend income is recognized on the ex-
dividend date, and interest income is recognized on an accrual basis.
Securities owned are reflected in the accompanying statement of
assets and liabilities and the schedule of portfolio investments at
quoted market value. Quoted market value represents the last recorded
sales price on the last business day of the calendar year for
securities traded on a national securities exchange. If no sales were
reported on that day, quoted market value represents the closing bid
price. The cost of investments reflected in the statement of assets
and liabilities and the schedule of portfolio investments is the same
as the basis used for Federal income tax purposes. The difference
between cost and quoted market value of securities is reflected
separately as unrealized appreciation (depreciation) as applicable.
<TABLE>
<CAPTION>
Net unrealized appreciation
(depreciation): 2000 1999 Net Change
<S> <C> <C> <C>
Aggregate gross unrealized
appreciation
on securities $34,780,980 $28,835,225
Aggregate gross unrealized
depreciation
on securities (1,737,097) (404,984)
Net $33,043,883 $28,430,241 $4,613,642
</TABLE>
The net realized gain (loss) from the sales of securities is
determined for income tax and accounting purposes on the basis of the cost
of specific securities. The gain computed on the basis of average cost
would have been substantially the same as that reflected in the
accompanying statement of operations.
F-12
B. Federal Taxes -
The Fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and not be
subject to federal income tax. Therefore, no income tax provision is
required. The Fund also intends to distribute its taxable net
investment income and realized gains, if any, to avoid the payment of
any federal excise taxes.
The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. In addition, due to
the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized
gains or losses were recorded by the Fund.
C. Distribution To Shareholders -
The Fund accrues income dividends to shareholders on a quarterly
basis as of the ex-dividend date. Distributions of net realized gains
are made on an annual basis to shareholders as of the ex-dividend
date.
D. Equalization -
The Fund uses the accounting practice of equalization by which a
portion of the proceeds from sales and costs of redemption of capital
shares, equivalent on a per share basis to the amount of undistributed
net investment income on the date of the transactions, is credited or
charged to undistributed income. As a result, undistributed net
investment income per share is unaffected by sales or redemption of
capital shares.
E. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(2) INVESTMENT ADVISORY CONTRACT
Under an Investment Advisory Contract, Bridges Investment
Counsel,Inc.(Investment Adviser) furnishes investment advisory
services and performs certain administrative functions for the Fund.
In return, the Fund has agreed to pay the Investment Adviser a fee
computed on a quarterly basis at the rate of 1/8 of 1% of the average
net asset value of the Fund during the quarter, equivalent to 1/2 of
1% per annum. Certain officers and directors of the Fund are also
officers and directors of the Investment Adviser. These officers do
not receive any compensation from the Fund other than that which is
received indirectly through the Investment Adviser.
F-13
The contract between the Fund and the Investment Adviser provides that
total expenses of the Fund in any year, exclusive of stamp and other taxes,
but including fees paid to the Investment Adviser, shall not exceed, in
total, a maximum of 1 and 1/2% of the average month end net asset value of
the Fund for the year. Amounts, if any, expended in excess of this
limitation are reimbursed by the Investment Adviser as specifically
identified in the Investment Advisory Contract. There were no amounts
reimbursed in the six months ended June 30, 2000.
(3) DIVIDEND DISBURSING AND TRANSFER AGENT
Dividend disbursing and transfer agent services are provided by
Bridges Investor Services, Inc. (Transfer Agent). The fees paid to the
Transfer Agent are intended to approximate the cost to the Transfer Agent
for providing such services. Certain officers and directors of the Fund
are also officers and directors of the Transfer Agent.
(4) SECURITY TRANSACTIONS
The cost of long-term investment purchases during the six months ended
June 30, was:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
United States government obligations $ -- $ --
Other Securities 12,927,031 5,407,284
Total Cost $12,927,031 $5,407,284
</TABLE>
Net proceeds from sales of long-term investments during the six
months ended June 30, were:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
United States government obligations $ -- $ 200,500
Other Securities 7,614,006 2,599,557
Total Net Proceeds $7,614,006 $2,800,057
Total Cost Basis of
Securities Sold $6,195,634 $2,273,470
</TABLE>
(5) NET ASSET VALUE
The net asset value per share represents the effective price for all
subscriptions and redemptions.
F-14
(6) CAPITAL STOCK
Shares of capital stock issued and redeemed are as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Shares sold 261,706 60,520
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 25,332 5,988
287,038 66,508
Shares redeemed 26,066 17,106
Net increase 260,972 49,402
</TABLE>
Value of capital stock issued and redeemed is as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Shares sold $11,496,850 $2,176,038
Shares issued to shareholders in
reinvestment of net investment
income and realized gain from
security transactions 1,068,927 210,768
$12,565,777 $2,386,806
Shares redeemed 1,135,678 618,797
Net increase $11,430,099 $1,768,009
</TABLE>
(7) DISTRIBUTION TO SHAREHOLDERS
On April 24, 2000, a capital gains distribution of $.6910571 per share
was paid from transactions made between December 1, 1999 and December 31,
1999. The total payment was $1,058,779 as shown in the Statement of
Changes in Net Assets on Page F-10. This distribution was paid to
shareholders of record on January 14, 2000.
On July 11, 2000, a cash distribution of $.105 per share was declared from
net investment income accrued and earned through June 30, 2000. The total
amount of the dividend to be paid is $186,396.29. The dividend will be
paid on July 24, 2000, to shareholders of record on July 11, 2000.
<PAGE>
